It's a cliché, but it's true, and bears repeating during these challenging economic times: It's not a market for faint-of-heart investors, and those with low risk tolerances.

Most investors are side-lined, and with good reason. The pronounced U.S. recession continues. Meanwhile, other economic issues await policy resolution in Washington, but the two major political parties are not exactly singing kumbayah.

Well what's an investor to do? Think: Making something out of nearly nothing. Waste Management does.

"We are selectively taking advantage of deep values such as Waste Management (NTSE: WMI), which is selling at a compelling valuation," says Jim Stack, a safety-first money manager.

In his InvesTech Market Analyst he adds, "Waste Management displays the characteristics we search for in new investments including a distinct competitive advantage and solid financials.

"It is a giant in its industry; Waste Management is the largest solid waste management company in North America. Founded in 1894, it serves nearly 20 million customers.

"With the nation's largest network of landfills, Waste Management has significant pricing power and can charge fees to competitive waste haulers who don't own, or have access to, their own landfills.

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

Founded in 1945 in a garage workshop in southern California, Mattel Inc. (NYSE: MAT) is now the world's biggest toy maker, with a market cap of about $5.2 billion. Number two Hasbro Inc. (NYSE: HAS) has a market cap of about $4.2 billion. Mattel produces from everything Barbie and American Girl, to Hot Wheels, Fisher Price toys, Scrabble, and the Magic 8 Ball, as well as tie-ins with Pixar, the Dark Knight, Harry Potter, and Nickelodeon. However, in 2002 Mattel shut its last factory in the United States, and since then most of its products have been produced in China.

That decision came back to bite Mattel when, beginning in the summer of 2007, it was forced to issue a series of recalls of Chinese-made toys that contained lead paint. The company is still reeling from that PR disaster, which for some reason included an apology from Mattel to the Chinese people. The situation prompted BloggingStocks contributor Tom Barlow a year ago to suggest (tongue in cheek) that Mattel merge with Waste Management Inc. (NYSE: WMI) so that toxic toys could go directly where they belonged, bypassing the middleman (i.e., the children). That would be one way to make over the company, I guess.

As Christmas of 2007 approached, it looked like the worst might be behind Mattel. The year-end numbers were respectable, and some investors were beginning to eye Mattel again. But first quarter 2008 results were disappointing, and by mid year, expectations were very low. The share price has continued to slide since the recalls, reaching a multi-year low recently. While there was a copyright infringement lawsuit settled in Mattel's favor (though they didn't get as much out of it as they wanted), and they are no doubt hoping for the Dark Knight and other tie-in merchandise to help boost what otherwise looks like it could be dismal holiday season for retailers, the newest thing Mattel has to contend with is claims by some parents that one of its dolls secretly promotes Islam, which Mattel denies.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Advanced Micro Devices Inc. (NYSE: AMD) narrowed its Q3 net loss on rising revenues.
• AMR Corp. (NYSE: AMR) posted a deeper-than-estimated Q3 loss but ordered 42 new planes.
• Citigroup Inc. (NYSE: C) reported its fourth straight quarterly loss on another write-down.
• Coca-Cola Co. (NYSE: KO) posted better-than-expected Q3 results on growth overseas.
• CSX Corp. (NYSE: CSX) reported strong Q3 results on lower fuel prices and cost controls.
• eBay Inc. (NASDAQ: EBAY) topped Q3 expectations but lowered its full-year guidance.
• Gilead Sciences (NASDAQ: GILD) beat expectations, sending shares higher.
• Google Inc. (NASDAQ: GOOG) better-than-expected Q3 results sent shares higher.
• Harley-Davidson Inc. (NYSE: HOG) international growth couldn't overcome disappointing results.
• Hershey Co. (NYSE: HSY) results in Q3 were in line with analysts' expectations.
• IBM (NYSE: IBM) posted strong Q3 results and offered an optimistic outlook.
• Intel Corp. (NASDAQ: INTC) posted strong Q3 results but warned of lower demand in Q4.
• Intuitive Surgical Inc. (NASDAQ: ISRG) strong results easily topped expectations, but shares fell.
• Johnson & Johnson (NYSE: JNJ) posted strong Q3 results and raised its full-year guidance.

How will we know when things have thawed? Everyone's looking at LIBOR and I can't blame them as that indicator of lending from one bank to another bank is crucial for the way the system is supposed to work. It's a good thermometer for certain, but I don't want it to overstay its welcome, because there are other "true" indicators out there besides just LIBOR.

I am looking at something else: takeovers. On Monday, we saw Waste Management (NYSE:WMI) pull its bid for Republic Services (NYSE:RSG) , a smart idea as WMI had dropped so precipitously despite reporting better-than-expected earnings that one had to question if it was worth doing it. More important, though, getting the money was proving to be possible, but difficult. This situation also prevailed in Altria's (NYSE: MO) buy of UST (NYSE: UST) where Goldman Sachs said, "Don't bother, wait," even though the integration of the two is crucial for Altria's growth.

Now I expect deals to be done if the banks are for real about lending.

Further, the endless margin selling has created tremendous bargains for well-capitalized companies to buy other companies that have brimming order books but are being kept down because of hedge fund redemptions. How can some company not want to buy a Trinity (NYSE:TRN), for example, which has been virtually cut in half even though both presidential candidates are pro-wind? Or how about a Foster Wheeler (NASDAQ: FWLT) or a Joy Global (NASDAQ:JOYG) or a Terex (NYSE: TEX) betting that if there is credit there will eventually be a revival?

Waste Management (NYSE: WMI) really rocketed on Monday. Its shares closed up nearly 18% to a final price of $30.39. Volume was heavy. No doubt the company's preliminary earnings report helped get things going for the company that makes its money off ridding the world of trash.

For the third quarter, Waste Management is forecasting an increase in its top line of 3.6%. It should book revenues of $3.5 billion. For the bottom line, the company should do at least $0.62 per share, which is two pennies above Wall Street estimates. Even better, this represents a 15% improvement over last year's earning's performance. Not bad, I suppose, but was the 18% gain in the stock price truly reflective of an organic breakout? Keep in mind that the Dow rallied almost 1000 points on Monday. That obviously had a lot to do with the fantastic price appreciation. In addition, Tom Taulli covered how Waste Management dropped its bid for competitor Republic Services (NYSE: RSG). As Tom pointed out, Waste Management probably didn't want to rock the boat as far as its credit rating was concerned. So the traders probably also took this into consideration when placing their bids.

But why would I want to buy the stock now after its stellar one-day performance? I'd much rather take a look at the company after it pulls back. I'm just not convinced that all of the action in the stock was due to strong conviction on the part of investors. I'd have to watch how the price behaves over the next few days before making a decision. All of these bounces that we're going to inevitably see after suffering many days of hellish declines in the major indexes are to be approached with caution if you're looking for quick trading gains. Long-term investors can obviously have a different attitude going into certain stocks. In the case of Waste Management, I will give credit for its attractive yield. But you'll need to perform more due diligence beyond the yield to see if this is one you should look at or not.

Disclosure: I don't own any company mentioned; positions can change at any time.

The credit crunch has made it nearly impossible for private equity firms to pull off multi-billion dollar deals. As a result, a variety of strategic buyers have capitalized on the situation.

But, even this trend may falter. Just look at Waste Management Inc.'s (NYSE: WMI) $6.73 billion buyout bid for rival Republic Services Inc. (NYSE: RGS) Well, today Waste Management said it is going to drop the deal.

Why? Of course, it's about the "market conditions."

But, even top companies are having difficulties getting financing. Besides, a big financial commitment could put pressure on Waste Management's credit rating.

Then again, the good news for Waste Management is that the core business continues to be strong. The company forecasts Q3 earning at $0.62 to $0.63 per share. In fact, the recent decline in fuel costs should be a nice boost.

So far in today's trading, the shares of Waste Management are up 6% to $27.29. Republic's shares are up 3.47% to $3.47%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Waste Management Inc. (NYSE: WMI) raised its hostile bid for smaller rival Republic Services Inc. (NYSE: RSG) by more than 8% to $6.73 billion, a premium that should be enough to scuttle Republic's $6.24 billion purchase of Allied Waste Industries Inc. (NYSE: AW).

Under the terms of the deal, Waste Management would buy Republic for $37 per share, a premium of almost 33% to Republic's closing price on July 11, the last trading day before the company's buyout proposal was disclosed. The proposal is above Republic's all-time high stock price. Moreover, Waste Management will pay Republic, which rejected Waste Management's earlier offer as inadequate, a fee of $250 million if the merger does not close because of opposition from the U.S. Department of Justice.

"Our $37.00 all-cash proposal clearly offers Republic stockholders a better and more certain value
alternative than is contemplated in the Republic-Allied transaction," said David P. Steiner, Waste
Management's CEO, in a press release. "We believe our proposal is clearly superior for Republic's stockholders and is designed so we can work cooperatively with Republic to structure a transaction that would benefit both
Republic and Waste Management stockholders."

A combined Waste and Republic would create annual synergies of $200 million, $50 million more than the savings created by the Republic-Allied deal, according to the Wall Street Journal. The reason for Waste Management's interest in Republic is simple according to the paper: "Though smaller than Waste or Allied, Republic is generally regarded as the best-run trash hauler in the country, and its stock has outperformed its rivals."

Today would be described as being choppy disappointment at best. The markets started out strong on a government bailout proposal for GSE's but traders went right back to shorting financials on big gap ups. After today, we'll get major earnings reports coming on a non-stop basis and tomorrow we'll also start to see some key data around producer prices tomorrow morning. Here are today's unofficial closing bell levels:
DJIA 11,052.10 (-48.44)
S&P500 1,228.02 (-11.46)
NASDAQ 2,212.87 (-26.21)
10YR T-Note 3.88% (-0.06%)
52-WEEK LOWS
TOP ANALYST UPGRADES
TOP ANALYST DOWNGRADES

Anheuser-Busch Companies, Inc. (NYSE: BUD) saw a gain as the company finally capitulated and agreed to be acquired now that InBev boosted its buyout offer price to $70.00 from $65.00.

The largest waste disposal company in the U.S., Waste Management Inc. (NYSE: WMI), wants to get even bigger. The company announced today that it proposes to pay $34 per share – or $6.3 billion -- for rival Republic Services, Inc. (NYSE: RSG).

On problem here is that Republic is already the subject of a merger with Allied Waste Industries, Inc. (NYSE: AW) announced in mid June. Although, if you take a look at the Republic-Allied merger agreement, there are clauses that allow Republic to entertain alternative offers. What's more, it looks like Waste Management may have access to internal data.

All in all, Waste Management is highly confident it will get the deal done: the firm has a plan for dealing with antitrust issues (likely involving divestitures); the investment grade status should be maintained; and the dividend will remain intact.

Without the benefit of any due diligence, Waste Management believes the deal will be accretive in the first year and provide at least $150 million in synergies. Basically, there should be lots of room to rip out duplicative costs, as well as get efficiencies from scale.

Waste Management also announced today its preliminary figures for Q2. The company plans to generate revenues of $3.49 billion, up 3.9% from the same period a year ago. Earnings are expected to be $0.64 per share.

So far in today's trading, though, Waste Management's stock is off 5% to $34.75. Of course, Republic stock is 15.6% higher to $32.25, while Allied Waste shares are down 7% to $11.15.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Republic Services (NYSE: RSG) is recently trading at $33.22, above its close of $27.90 Friday.

Waste Management (NYSE: WMI) announced it made a proposal to acquire all of RSG outstanding common stock for $34 per shares in cash. Allied Waste (NYSE: AW) offered to acquire RSG on June 23 for 0.45 shares of AW for each share of RSG.

RSG overall option implied volatility of 31 is near its 26-week average of 30 according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

"Executives from Waste Management (NYSE: WMI), a stock on our recommended list, presented the company's case to Wall Street at a conference sponsored by J.P. Morgan," says Bill Martin.

In his BullMarket.com newsletter, the advisor explains, "We reviewed the presentation from CEO David Steiner and CFO Robert Simpson and found the company's story to be quite compelling for long-term investors."

"Steiner began by outlining some of the basic drivers of the company's business. Waste Management is the nation's largest trash hauler, and he pointed out that it along with its two-largest competitors own two-thirds of the nation's landfill space.

"The percentage, he said, will only increase over time as municipalities, which for the most part own the remaining third, aren't investing in new capacity the way private industry is.

"Since the biggest cost component is the tipping fees charged by landfills -- it amounts to 40% of total costs -- the more landfill space the company operates, the more it is able to capture those fees from other haulers.

"Landfills also form the basis for the company's initiatives in transforming the methane gas that builds up naturally in landfills into fuel for its trucks. The company plans to invest $70 million this year in efforts to convert landfill gas to fuel.

Waste Management Inc. (NYSE: WMI) is the biggie in the trash business. But, things may get tougher.

According to a report in the Wall Street Journal [a paid publication], Allied Waste Industries Inc. (NYSE: AW) and Republic Services Inc. (NYSE: RSG) are contemplating a $6.5 billion merger (a stock-for-stock swap). The companies are the second and third largest trash haulers in the U.S., respectively.

Yes, it's not a sexy industry, but it's fairly recession-resistant. There are some pressures, though, such as higher energy prices. But, the industry has been increasing prices to accommodate for this.

And, of course, if Allied and Republic combine operations, that should mean even more pricing power. Actually, the total revenues would be about $9.3 billion or so.

Besides, Allied could use some help. The company's revenues have languished and the debt load is a hefty $6.7 billion.

In Friday's trading, Allied shares were up 7.7% go $15, as investors speculated on a possible deal.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

In the equities asset class, there are show horses -- high-profile, glamorous stocks that receive considerable news coverage; and work horses -- lesser-known stocks that don't receive a great of coverage, but get the job done, nonetheless. Put Waste Management decidedly in the latter category.

Waste Management, Inc. (NYSE: WMI) is the No. 1 waste disposal company in the United States. The company provides collection, transfer, recycling and resource recovery services to 21 million residential, industrial, municipal and commercial customers. WMI operates more than 430 collection operations and 277 landfills.

Analysts like WMI's strategy to sacrifice collection volume in favor of maintaining its pricing strategy and margins.

Here are a few highlights of this past week's earnings coverage from BloggingStocks:

• Abercrombie & Fitch Co. (NYSE: ANF) beat estimates on strong sales and higher profit margins.
• Baidu.com Inc. (NASDAQ: BIDU) profit soared on strong revenue from online marketing.
• Coca-Cola Co. (NYSE: KO) earnings and revenue surged in the fourth quarer.
• Dean Foods Co. (NYSE: DF) missed expectations on rising commodity costs and lower profit margins.
• Deere & Co. (NYSE: DE) posted better-than-expected profits as rising grain prices spurred demand.
• Goodyear Tire & Rubber Co. (NYSE: GT) posted solid results on cost savings and debt reduction.
• Insight Enterprises Inc. (NASDAQ: NSIT) beat expectations and raised its guidance.
• LECG (NASDAQ: XPRT) posted a net loss despite a slight increase in revenue in the fourth quarter.
• Loews Corp. (NYSE: LTR) missed estimates due to profit decline in its CNA Financial (NYSE: CNA) affiliate.
• Marsh & McLennan Inc. (NYSE: MMC) missed estimates on weakness in its insurance services business.
• Playboy Enterprises Inc. (NYSE: PLA) posted disappointing results on weakness in publishing and TV.
• Qwest Communications International Inc. (NYSE: Q) fourth-quarter and full-year results met estimates.
• Sierra Wireless Inc. (NASDAQ: SWIR) beat esimates on the launch of new product s.
• Taser International Inc. (NASDAQ: TASR) profits doubled, which was in line with expectations.
• Visteon Corp. (NYSE: VC) posted a fourth-quarter loss on restructuring costs and write-downs.
• Waste Management Inc. (NYSE: WMI) beat espectations and offered 2008 guidance.
• Wyndham Worldwide Corp. (NYSE: WYN) earnings met expectations and were buoyed by lodging revenue.
• Zoltek Companies Inc. (NASDAQ: ZOLT) missed earnings estimates due to inventory buildup.

Upcoming results to watch for include Wal-Mart (NYSE: WMT), Hewlett-Packard (NYSE: HPQ), OfficeMax (NYSE: OMX), Whole Foods (NASDAQ: WFMI), MGM Mirage (NYSE: MGM), JCPenney (NYSE: JCP), and Safeway (NYSE: SWY).

Visit AOL Money & Finance for more earnings coverage.